Econoday Economic Report: Durable Goods Orders March 28, 2012

2012 Economic Calendar

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Durable Goods Orders

Released On 3/28/2012 8:30:00 AM For Feb, 2012

	Prior	Prior Revised	Consensus	Consensus Range	Actual
New Orders - M/M change	-4.0 %	-3.6 %	2.9 %	0.9 % to 6.4 %	2.2 %
New Orders - Yr/Yr Change	8.1 %	8.7 %			12.2 %
Ex-transportation - M/M	-3.2 %	-3.0 %	1.5 %	0.4 % to 2.6 %	1.6 %
Ex-transportation - Yr/Yr	5.7 %	6.1 %			8.5 %

Highlights
Durables orders rebounded in the latest month but disappointed in magnitude though the excluding transportation component was as expected. In February, new factory orders for durables rebounded 2.2 percent, following a revised 3.6 percent drop in January (prior revised estimate, down 3.7 percent) and 3.3 percent jump in December. The market consensus called for a 2.9 percent gain.

Excluding transportation, durables made a 1.6 percent comeback after a revised 3.0 percent decline in January (prior revised estimate, down 3.2 percent), and a 2.3 percent advance in December. February's boost came in marginally higher than analysts' projection for a 1.5 percent rise.

The very volatile transportation rebounded 3.9 percent in February after dropping 5.3 percent the month before. Subcomponent strength was led by defense aircraft with increases also seen in nondefense aircraft and motor vehicles.

Outside of transportation, gains were widespread. Improvement was seen in primary metals, up 1.3 percent; fabricated metals, up 1.3 percent; machinery, up 5.7 percent; and computers & electronics, up 2.7 percent. Losing ground were electrical equipment, down 2.5 percent and "other," down 0.6 percent.

Business investment in equipment has been choppy as new orders for nondefense capital goods excluding aircraft rebounded 1.2 percent in February after dropping 3.7 percent in January and rising 3.5 percent in December. Shipments for this series gained 1.4 percent in February, following a 3.0 percent dip in January and a 2.8 percent advance in December.

On a monthly basis, the volatility in transportation is not a big deal. Although the ex-transportation component rebounded and met expectations, the overall trajectory of manufacturing is not as strong as hoped but is still providing forward momentum for the economy.

On the news, equity futures eased slightly while Treasury rates were little changed.

Market Consensus before announcement
Durable goods orders in January fell back a revised 3.7 percent, following a revised 3.3 percent jump in December. Excluding transportation, durables fell a revised 3.0 percent after a 2.3 percent advance in December. By components, weakness was led by transportation but other components were mostly down.

Definition
Durable goods orders reflect the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. The first release, the advance, provides an early estimate of durable goods orders. About two weeks later, more complete and revised data are available in the factory orders report. The data for the previous month are usually revised a second time upon the release of the new month's data. Why Investors Care

Monthly fluctuations in durable goods orders are frequent and large and skew the underlying trend in the data. In fact, even the yearly change must be viewed carefully because of the volatility in this series.
Data Source: Haver Analytics

2012 Release Schedule

Released On: 1/26 2/28 3/28 4/25 5/24 6/27 7/26 8/24 9/27 10/25 11/27 12/21

Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

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Actual Data Source: Haver Analytics